US gov’t accuses BofA of civil fraud in bond sale

WASHINGTON (AP) – The U.S. government has accused Bank of America Corp. of civil fraud, saying the company failed to disclose risks and mislead investors in its sale of $850 million of mortgage bonds during 2008.

The Justice Department filed a civil suit against the bank and two of its subsidiaries on Tuesday. The Securities and Exchange Commission filed a related suit against Bank of America.

The authorities say Bank of America lied to investors about the risk of the mortgages underlying the investment.

Bank of America disputed the allegations.

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